Understanding Quality and Costs in Congenital Heart Surgery Abstract Congenital heart defects are the most common birth defects, and children requiring heart surgery account for the highest resource utilization across US children's hospitals. While overall outcomes have improved in recent years, wide variation across hospitals remains, and numerous stakeholders aim to improve quality of care for these patients. These efforts include federal initiatives such as the pediatric sections of the Affordable Care Act scheduled to take effect over the next several years, which will tie reimbursements to children's hospitals to achieving not only high quality but also cost savings. The success of these initiatives is dependent on both reliable measures of quality and an understanding of the relationship between quality and costs, particularly for common and resource-intense conditions such as congenital heart disease. Unfortunately, existing quality indicators in this population and flawed, with limited ability to reliably discriminate between hospitals. Composite measures, which empirically combine information across multiple relevant quality domains, have been shown to be more reliable indicators of quality across a variety of subspecialties, but have not been developed to date in congenital heart surgery. In addition, existing quality metrics and alternatives have not been evaluated against measures of resource utilization, which has become increasingly important in the current environment. This project aims to address these knowledge gaps through applying advanced Bayesian methods to empirically combine information across multiple quality domains to develop a composite quality metric in congenital heart surgery. The measure will be validated through testing its ability to discriminate between hospitals, and forecast future performance, in comparison to existing individual metrics. Second, we will examine the relationship between our composite measure of quality and cost, and investigate the types of costs most associated with poor quality. To conduct these analyses, we will leverage an innovative collaboration between two major stakeholders in the field, and link the Society of Thoracic Surgeons (STS) Congenital Heart Surgery Database (a rich clinical registry) with the Children's Hospital Association (CHA) Database (a large all-payer administrative database containing important resource utilization information), which will create a unique dataset encompassing nearly all US pediatric heart centers. Our results will have immediate value to policy makers and payers currently designing incentives aimed at improving quality and reducing costs across children's hospitals. In addition, the information generated from this project will be available for immediate inclusion in the regular feedback reports to US children's hospitals participating in STS and CHA (nearly all US pediatric heart centers), which will allow hospitals to better measure and benchmark their performance against national data and target areas for improvement.